|Thu May 13 2010 08:27:25|
Why Did eBay Australia Back Down on PayPal Policy?
By: Ina Steiner
In 2008, the ACCC regulatory agency said eBay Australia's requirement that PayPal be among the payment choices offered by its sellers was "in itself unlikely to raise trade practices concerns." Two years later, the ACCC has pressured eBay Australia to back down from its policy - an unusual move by the agency that was prompted by the "substantial" number of complaints it had received.
eBay had announced in April 2008 a two-stage plan to ban all payment methods on its Australian marketplace other than its own PayPal service. eBay was soon forced to withdraw its notification after the Australian Competition and Consumer Commission (ACCC) said consumers should choose whether to use PayPal for their transactions.
However, the agency continued to allow eBay Australia to require that all sellers accept PayPal.
Today, eBay Australia and the ACCC issued separate statements on the matter, with eBay announcing that it was modifying its policy. The ACCC acknowledged that it was pressure it received - presumably from eBay sellers - that kept its investigation open:
"It is not customary for the ACCC to refer to investigations that are not in the public arena, however a substantial number of complaints have been received about certain eBay policies which affect the offering and acceptance by eBay traders of online payment services."
Will users feel eBay went far enough with its policy change? eBay will continue to limit the choices for payment. Beginning July 14, eBay's Accepted Payments policy will require sellers offer at least one of three accepted safer payment methods: PayPal, Paymate and merchant credit card. However, other payment methods such as Google Checkout are still banned from the site.
eBay also has restrictions on the payment methods sellers are allowed to offer on its other marketplaces. In the UK, eBay offers a similar requirement to the one it just relaxed in Australia: "eBay requires all sellers listing on eBay.co.uk to offer payments through PayPal (with some exceptions)," and allows sellers to also offer merchant credit cards, bank electronic payments, and payment upon pickup.
In the U.S., sellers are required to offer one or more of the following electronic payment choices: PayPal, ProPay, Moneybookers, Paymate, merchant credit card (payment upon pickup and Bill Me Later are valid payment methods as well). Cash and checks are banned.
eBay Australia's payments policy clearly mattered to Google, which has its own payment service - in 2008, it filed an anonymous complaint with the ACCC calling eBay's policy to go PayPal-only anti-competitive. (An AuctionBytes reader outed Google as the complainant.)
Paymate had also filed a complaint with the ACCC in 2008.
Given the ACCC's statement, it seems likely that it was sellers in Australia that kept the pressure on the agency. It appears the agency now considers the matter closed, at least for the time being. Its statement today read, "The ACCC has decided to discontinue its current inquiries into eBay's payment policies. However, this does not restrict the ACCC from reviewing the effects of eBay or PayPal's conduct in Australia if it raises competition concerns in the future."